Fisheries: Commission issues statement on
the emergency in the sector

Responding to the grave difficulties currently
faced by the European fisheries sector as a result of massively increased fuel
costs, Fisheries Commissioner Joe Borg has renewed his call for the
restructuring of the sector before it is too late. The difficulties faced by the
EU fisheries sector have their roots in a structural mismatch between the size
of the fleet and the sustainable level of fishing possibilities. These problems
have been seriously compounded by the sharp increase of fuel prices over the
past few years. Marine Fuel Prices have gone beyond 0.7€/l
in most European harbours, an increase of around 240% since 2004.

"I am very aware of the acute difficulties that the European sector is
currently facing, and have seen for myself the effects it is having on
fishermen," said the Commissioner. "We must act now to restructure: I remain
convinced that there is a future for European fisheries, but only if Member
States, the sector and the Commission work together to create a smaller, more
fuel-efficient fleet that is better matched to fishing possibilities. The
Commission stands ready to work hand in hand with Member States and stakeholders
to achieve this. Rapid rescue and restructuring aid is possible if it enhances
fishing and fleet sustainability, and it can make a difference", added the
Commissioner. "We are monitoring the situation very closely and looking for ways
to work with the sector to overcome the serious problems they are now facing to
better enable them to undertake the necessary restructuring. False solutions,
however, cannot be the way forward. Higher quotas, as some have called for,
would be completely counterproductive, serving only to further endanger the
stocks that fishermen depend on. Fuel subsidies, besides being illegal, would do
absolutely nothing to deal with the underlying problems. On the contrary, they
would serve only to perpetuate the problems of the sector and make the crash
even greater when it comes. Act now to restructure", declared Joe Borg, "but
false solutions are not the way forward".

The Commission has been following these trends very closely, and already in
2006 made an analysis of the difficulties facing the fisheries sector. In March
of that year it adopted a Communication on "improving the economic situation in
the fishing industry" which laid down measures that could be taken by Member
States to help their fishing sectors adapt to the higher fuel prices.

The Communication made it clear that operating aid or fuel subsidies were not
an appropriate or permissible response to high fuel prices, given that oil
prices were likely to stay at a high level.

However, the Commission has encouraged the Member States to adopt rescue and
restructuring plans in order to help the adjustment of the segments of their
fishing fleets particularly affected by the increase in oil prices, while
addressing at the same time the structural causes of the difficulties –
fleet overcapacity and fuel-inefficient equipment and practices.

Rescue aid, which should be limited to the minimum necessary, should be seen
as a short-term aid to keep an ailing enterprise financially afloat for the time
necessary to work out a restructuring or liquidation plan. Such rescue aid,
which may last no more than six months, must take the form of a reimbursable
loan or guarantee. However, where the rescue aid is followed by an approved
restructuring plan, the rescue aid can be repaid with support received by the
firm in the form of restructuring aid.

Further restructuring of fishing enterprises to restore economic viability
will often imply investment to adapt fishing vessels. General rules on aid for
such investment are set out in the relevant EU guidelines on State aid EU aid
from the European Fisheries Fund (EFF) can also be mobilised to that effect,
under the same conditions.

National aid for certain types of modernisation and equipment of vessels that
is not normally allowed under the above conditions could also be considered if
it is aimed at restructuring fishing enterprises as part of rescue and
restructuring schemes authorised by the Commission (see point 4.1.2 of the
guidelines on State aid to fisheries mentioned above). Upon notification of
these schemes by Member States, the Commission will assess them on the basis of
the relevant EU guidelines on State aid.

Provided that the rescue and restructuring plans are based on realistic
assumptions and address the structural deficiencies of the fleets concerned by
restoring a better match between capacity and fishing possibilities, they could
in particular include support measures such as:

Short term rescue aid to be reimbursed when the restructuring measures are
implemented,

a one-off change in fishing gear resulting in a less fuel-intensive fishing
method,

purchase of equipment to improve fuel efficiency,

one-off replacement of the engine under certain conditions.

The
Commission is closely following the evolving situation very closely so as to be
able to respond as necessary. This includes a readiness to work with Member
States to review EFF Operational Programmes to allow more targeted spending at
this difficult time, and to effect an analysis of the fish supply chain to
investigate price inflexibilities.